By David Lykken
Special to MPA
It seems a token of human nature to think nostalgically about previous generations. We always seem to think that things are getting worse, and that things were better in the past. And, of course, our parents thought the same thing. But, sometimes, the data turns out to support our disappointments.
Mortgages, for example, are not selling quite like they have in the past. And the question loan originators seem to be asking everyday is, "Why aren't people buying?" There are a dozen answers to this question--some carrying more weight than others. But, for now, I'd like to call attention to two that have been discussed quite a bit recently.
First, there's the issue of inventories. The amount of properties available for sale in most markets is down. You can't sell what's now there, and this is something that many lenders are struggling with right now. But there is a little that can be done about that--at least directly. The greater issue contributing to falling mortgage purchases is the greater percentage of inexperienced homebuyers. More and more buyers are buying for the first time later and their lives. Therefore, first time homebuyers have taken up a larger percentage of the market. These homebuyers take longer to process and, sometimes, cannot be seen through to closing.
While there isn't a great deal we can do to make more homes available, we can become better at closing those opportunities we currently have. Even if more homebuyers are buying for the first time, that has not prevented us from using the appropriate tools to help them in the past; it shouldn't be stopping us now. We can do something about this problem. Let's get creative--and let's get those numbers up!
David Lykken is 40-year industry veteran who has been an owner operator of three mortgage banking companies and a software company. As co-founder and Managing Partner of Mortgage Banking Solutions, David consults on virtually all aspects of mortgage banking with special emphasis executive leadership development, corporate strategic direction and implementation as well as mergers & acquisitions. A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. Recently he started producing a 1-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across America.